Titan Acquisition Holdings, which was formed last year through the acquisition of two ship repair companies, on Wednesday said it has agreed to acquire a majority interest in Huntington Ingalls Industries
’ [HII] the San Diego-based ship repair facilities, expanding the company’s footprint to another major Navy port.
Terms of the deal, which is expected to close in the second quarter, were not disclosed.
Titan was created through the acquisition of MHI Holdings and Vigor Industrial by The Carlyle Group and Stellex Capital Management. Once the acquisition is complete, the company will have ship repair facilities in every Navy port in the U.S. with the exception of Florida.
San Diego is the Navy’s largest U.S. port and HII’s shipyard there is one of the largest services and repair sites in the country. Titan said the acquisition positions it to better serve its key defense customers, and creates economies of scale and will allow it to optimize performance.
“Our goal is aimed at creating a stronger company of scale, capable of providing differentiated, coast-to-coast services to the U.S. Navy, U.S. Army and other defense infrastructure, and maritime customers,” Tom Rabaut, Titan’s chairman, said in a statement. “Titan is well positioned with our unique, national assets to grow in the highly attractive ship repair and fabrication markets, supporting by compelling sector dynamics. The San Diego Shipyard is a great addition to the organization.”
Rabaut has been with The Carlyle Group since 2007. Previously, he was president and CEO of United Defense, which was sold to BAE Systems in 2005. United Defense had a ship repair business. After the sale, Rabaut served as president of BAE’s Land and Armaments Operating Group.
Titan’s customers include the Navy, Coast Guard, Military Sealift Command, Army, Boeing [BA], commercial customers and state and local ferry systems.
The San Diego shipyard doesn’t have a drydock. Titan has eight drydocks on the West Coast, including three in Portland, Ore., three in Seattle, and two in Ketchikan, Alaska.
Jim Marcotuli, president and CEO of Titan, said the acquisition is a “natural step in our evolution given its strategic location and wealth of talented employees. We look forward to sharing best practices and leveraging our collective assets to improve service to our valued customers.”
HII, which builds ships and submarines for the Navy and Coast Guard, said it will continue to provide sustainment services to its customers through its Newport News Shipbuilding, Ingalls Shipbuilding and Technical Solutions segments.
“We believe this transaction will enable us to leverage complementary capabilities, capacity and facilities to improve efficiencies and better serve the needs of our U.S. Navy customer,” Any Green, president of Technical Solutions, said in a statement.
No financial advisors were used in the transaction.
The San Diego ship repair facility is the former Continental Marine of San Diego. The shipyard provides shipfitting, welding, pipefitting, machinery, repair, marine electrical repair and installation, sheet metal repair and fabrication, boiler repair and preservation services.